(VOVworld) Vietnam is determined this year to hold inflation to single digits, stabilize the macro economy, gradually reduce interest rates and create tax incentives to boost business and production. A press briefing in Hanoi on Sunday following the regular cabinet meeting for January discussed ways to achieve these goals.

Minister Vu Duc Dam at the press briefing. Photo: chinhphu.vn

Minister Vu Duc Dam, Chairman of the Government Office said government is prepared for continued difficulties in foreign direct investment, exports and tourism. “Vietnam is committed to stabilizing its macro economy and holding inflation to single digits. At the same time, we need to increase production and maintain a reasonable economic growth, equaling or exceeding that of last year. A flexible monetary policy is needed to ensure the liquidity of the banking system, reduce interest rates and support businesses,” said Minister Dam.

Nguyen Thi Hong, Head of the State Bank’s Monetary Policy Department, said financial institutions are experiencing high liquidity now because cash flows have returned to the banks after the lunar new year. Regarding the steps the State Bank is going to take in the future, Hong said: “The State Bank has carried out several measures to improve liquidity in January. In February, credit organizations will implement government measures and at the same time restructure their assets. Inflation has continued to drop over the past few months but when to reduce the interest rate and by how much needs careful consideration and depends on the liquidity status of the credit organizations”.

The government will accelerate economic restructuring this year, with priority given to state-owned enterprises (SOEs) as Minister Vu Duc Dam put it. “First, state-owned enterprises need to focus on areas essential to the national economy. Second, SOEs should improve their management capacity."

Vietnam is facing major economic challenges this year, but success is achievable if ministries, sectors, and localities gear up from the beginning of the year.

Hong Van